I can't let 2006 end without noting my outrage that my home county of Arlington, Virginia, has seen fit to raise the personal property tax on vehicles from 4.4 to 5% of value. The stated rationale is the need to provide property tax relief. Hello! Property values in Arlington have more than doubled in the past six years, and property taxes have risen along with the increase in values. Arlington has cut the property tax rate a bit, but is still taking in far, far more in property tax revenues than it did just a few years ago. If Arlington couldn't survive on its property tax revenues at the height of the greatest residential real estate boom in area history, I really wonder how the country government going to handle its finances once the decline in residential real estate values starts showing up in property tax assessments.
Taxes in Arlington, VA:
That's a no-brainer - raise the tax rates.
Back in my day, they taxed cars, required a seal on the windshield to prove you paid it, and charged for the seal.
And of courses when you bought the house you paid a stamp tax on the deed and a fee on the deed of trust recording -- think it was 1% of value. Here in AZ, when you record either it's $12.50, thank you.
It's a '94 Toyota. Annual car tax, including sticker: $50. Annual car insurance: around $300, at least as far as I recall.
I thought about getting a $50,000 new car, as I could easily afford it and it would be really nice to have a new car. But who wants to pay an extra $2,000 a year to the state of Virginia plus an extra $1,000 or so a year to my insurer? If I had the car for 5 years, it would cost me $15k in depreciation plus abother $15k in annual taxes and insurance. It's not worth $30k for five years of having a nice car; I'll just stick with the beater.
Property Tax: $3/thousand
Sales Tax: 6.25% state, 1.5% local
State Income Tax: 3% above $5k - 5% of property taxes paid at primary residence
To be fair, there is a federal deduction for state income taxes. Still, it's a pretty high load.
Well, Arlington may want to try the Massachusetts solution. The Commonwealth bails out towns from its own tax revenues. This is called "local aid." The towns were very unhappy with ex-governor Mitt Romney because he didn't provide enough local aid. At the same time they have "circuit breakers" in place on property taxes, mainly for the sake of retired senior citizens living in houses obviously too big for them. To ask the seniors to sell their houses would no doubt be considered cruel and inhumane.
Given the large variations between the countries in his chart, it would be pretty stupid to draw any conclusions about what is "needed."
Arlington has huge amounts of money coming in. Population 200,000, jobs 200,000. So a bedroom community has to pay for its services with the taxes on, say, 100,000 beds and 15,000 cubicles, gas pumps, lumber yards, and Arlington has as many cubicles as beds to tax. And Arlington has been spending at a very high level - $17,000 per student in the public schools, $100 million for a recreation center over near Reagan National, another $100 million for a new Washington-Lee High School. And there's more! We have publicly supported Arts Centers, with studios for lucky local artists. As Everett Dirksen once said, pretty soon you are talking about real money.
Arlington County Taxpayers Assn quoted the Virginia Auditor of Public Accounts as follows for 2005:
Jurisdiction Total Spending Population Spending Per Capita
Arlington $721,741,259 195,600 $3,690
Fairfax $3,215,226,492 1,022,100 $3,146
Loudoun $733,057,708 252,300 $2,906
Prince William $967,494,000 355,300 $2,723
Alexandria $461,202,346 135,200 $3,411
Falls Church $52,015,745 10,800 $4,816
ACTA also says 2007 "budget is $1.0034 billion... dividing that by 203,000 residents (rounded) means that local government in Arlington County will spend just about $4,943 for each man, woman, and child." - this is a 25% increase since 2005. Recently, no worthy project has gone unfunded.
If you are spending at that level, the money has to come out of your pocket somehow. It was easy, during the seven fat years, for the Board to lower the tax rate by a little, but get more revenue because the assessed property tax values were up. In future, during the seven lean years to come, things will be a lot more contentions.
The good news is he's running for president so he can abolish car taxes nationwide.
This one percent cutback was going to destroy public education. It turns out that 70% of the cut was an elimination of an increase in pension contributions. Thank you, public-employee unions.
Property taxes are regressive, and the automobile tax is especially regressive. Gilmore's plan provided a rebate on taxes paid on the first $20,000 of assessed value. That's progressive, right? Oh no, we can't do that, the man is a war criminal. At least we ended up with a partial reduction (75%) on the tax on the first $20,000. What was Gilmore thinking? How dare you use funds from a (progressive) income tax to offset a (regressive) property tax!?
Well, if he had actually had a plan to make up the revenue shortfall or to balance the budget, it might have made sense. But he didn't, and he left the Commonwealth a fiscal disaster.
That's not going to happen here. The rest of Virginia regards northern Virginia as a cash cow - tax money comes from northern Virginia to the rest of the state, never to it!
Like others who have responded here, I buy slightly used cars and keep them running as long as possible, and one of the reasons I do so is I don't want to pay Virginia a bunch of taxes.
Let's put this in perspective. If Dave owns a car worth $20,000, he now has to pay $1000 in personal property tax instead of $900 - a whopping extra $100 (I raise my pinky to my lips, Dr. Evil style). Since the man rents rather than owning, he pays no real estate taxes, and that hundred bucks or so represents the sum total of the extra tax burden imposed on Dave's groaning back. This is the littlest violin...
I don't think that is strictly correct. Presumably his landlord pays taxes on the real estate Dave rents, and a portion of his rent is pays those taxes. Dave, however, gets no federal tax deduction for property taxes paid.
Dave, stop dithering and just buy a house. ;-)
Bill, what are you talking about? There's a line on my 1040 Schedule A for deducting property taxes. Also that nice new deduction for sales taxes for those of us with no state income tax.
In Florida we also have that horrible 2.5% property tax, BUT
-No state income tax
-Sales tax 7% (less than some with income tax and not on food or drugs.)
–Car tax of about $50 even for new cars
Arlington spends 50 percent more than Fairfax County on its schools, yet its students have lower test scores.
In the Bible, Pharaoh wisely listened to Joseph and saved money during the fat years in order to survive during the predicted famine which followed.
Arlington County's Board has foolishly done the opposite, borrowing money like crazy through bond issues during the fat years (the years in which real estate values and property taxes skyrocketed), to the point that 20 percent of school spending is on debt.
Now they have little cushion to rely on during the upcoming lean years, when real estate values will plunge, reducing property tax revenues.
I predict that they will hike taxes, and irresponsibly increase spending to even higher levels.
No amount of spending is too wasteful for the Arlington County Board, as the local paper, the Arlington Sun-Gazette, frequently points out.
Arlington spends 50 percent more than Fairfax County on its schools, yet its students have lower test scores.
These are some of the reasons why I live in Fairfax County, but right on the border with Arlington.
A line item budget with actual expenditure items rather than general categories is enlightening. Most folks look at it for the first time, scratch their heads, and ask, "Why am I paying for this...and this...and this?"
The other question is whether the county is getting the most for each dollar spent. Private industry is continiually purging its personnel as the economy expands and individual company operations expand. When's the last time we saw a 15% across the board cut in personnel at a local government? Private industry can do it; it happens all the time. Why can't government?
As a young manager I received my fist orders to cut 10% of the people in my organization. I immediately said it couldn't be done, impossible, the sky would fall, etc. An older guy took me aside and said, "If you can't do it, then you will be in that ten percent. You're supposed to be smart enough to figure it out." So, I cut 10%. The sky didn't fall, we met our quotas, we got more efficient, we got smarter, and business was profitable.
Now I give the orders to cut 10%, listen to the griping from the younger guys, and pass on that same advice I once received. And it all tends to work out. It would work with count government, too.
Don't you know that you should be happy to pay all those taxes? That's what makes America great and "first world"-- our big government and our high taxes! (Fortunately for us, other countries don't follow our example and raise their taxes, or grow their government.)
Complaining about taxes is selfish and short-sighted! The tax money is being spent with maximum efficiency, and when taxes go up, you can rest assured that more and more good things are about to happen! In fact, you should relish the opportunity to pay more taxes! The world becomes a better and better place with every dollar the government takes away from you to spend on the common good.
More like the admission fee to dying civilizations of last men.
You're preaching to the choir, believe me. I take good care of a 99 Passat and will drive it until it turns to dust around me. I pay essentially nothing in property taxes or insurance.
The savings has been sufficient to pay for.... my airplane. Well, the very small airplane I own half of. Well, okay, it doesn't cover ALL the expense, but you get the idea!
- Mr. Volokh at Wal-Mart: - "Sir, I gave you 20% off on your purchase of Spider-Man Underoos as the sale paper says but I had to charge you extra for the asparagus-flavored ice cream to cover the difference."
- Mr. Carpenter at the car dealer: "Sure, I'll throw in the low-riding rims at no extra charge, but I'll be forced to up the cost of the wiper blades to cover my losses."
In all seriousness, taxes and over-regulation are why I evacuated from New Jersey nearly six years ago to move out west. (I can't believe N.J. hasn't tried this car tax yet). I don't feel sorry for anyone who complains about them in New Jersey, because they voted those tax-and-spenders (re:Democrats) in office every single time no matter what. I can't believe that people just put up with this tax without making it a decisive campaign issue.
(Just to be clear, I'm not pleased that we have some of the highest healthcare costs in the country. That's dumb and obviously counterproductive, in both direct and indirect ways. But until the kneejerk reactions asserting breadbasket theories of who generates value in this country stop, I'm not going to stop pointing out where the money our nation runs on comes from. And it is not Kansas. Or Tennessee.)
Are you a fisherman? Beside the point, but I thought I'd ask, given your name. Or do you just denounce the little critters every morning, off the Battery walkways?
My point: Like you, I lived in NYC for many years, but eventually I decided that the cost of living was just killing me. A six figure income, and yet I was still living paycheck to paycheck. The usual story....
NYC's place as a seat of commerce (and the home of the NYSE) is an historical anomaly. That's all. Ports on the eastern seaboard are all in the same position. It doesn't mean that NYC has some special moral superiority, or special insight into capitalism that accounts for its prominance. Just historical luck, period. Sorry!
Actually, these days the city is forced to offer all sorts of tax incentives to big corporations to keep their HQ's in NYC. Otherwise they all woulda all moved to NJ years ago. Which explains, to a limited degree, why the cost of living/tax structure in that city is insane.
A lot of money runs through NYC in any given year. And a lot of federal tax dollars are generated as a result. But that would have happened anyway, regardless what you and I think. If NYC hadn't gotten there first, that action would have been spread out across dozens of states. And people in Iowa would be writing Volokh and telling us that we all owe them something.
Ya feel me?
With healthcare costs, aren't you a victim of your own success? Some excellent specialists are there, so wealthy people from other areas go there to be treated? I'm sure the high cost of living is a factor, but I'd bet some of it is because the personnel you have there is in fairly high demand.
We, as a country, have off-shored our most expensive jobs over the last 20 years.
Except those we supposedly can't export.
Why should the county commissioner make 62,000 plus benefits; we have a man/woman in India who'll do the same thing for 15,000 flat.
Shouldn't we at least consider the offer?
Another example of lawyer bashing based on ignorance.
A considerable amount of legal work is being outsourced right now. For example, it isn't at all unusual for us to export major litigation or merger document reviews and have them performed by (much much) cheaper talent overseas. These projects, which can require thousands of man hours, formerly were done by associates, or occasionally temp lawyers, in large US firms.
The cost savings to clients can be considerable, with no downgrade in quality, as far as I can tell.
We have yet to field a complaint from the "pesky lawyer's guild."
Now, I am sure that everyone here could chop that in half, and it would be at least as successful as the Iraq war. In other words, if you have a remarkably consistent level of expenditure across a large number of different societies with different traditions, and you think they are all fools, maybe your plan is not so good.
Do Filipino lawyers in Manila, or Indian lawyers in Bangalore, often practice law in the United States?
Now, I am sure that everyone here could chop that in half, and it would be at least as successful as the Iraq war. In other words, if you have a remarkably consistent level of expenditure across a large number of different societies with different traditions, and you think they are all fools, maybe your plan is not so good.
A lot of the economic principles being employed are flawed. The only thing that can create jobs and increase overall societal wealth is the private economy - the higher taxes are (above a certain baseline), the less jobs and wealth are created. But once taxes have been that high for so long those dependent on those funds - including politicians - represent entrenched interests that are hard to overcome. The tax money taken from the private economy and spent by the government has enormous opportunity costs. Here's a good paper illustrating these concepts with military spending in particular(pdf file):
http://www.mises.org/journals/scholar/woods2.pdf
Private industry by itself is a ravening beast only interested in supporting the few who control its levers of power. It is only with the combination of government regulation and worker representation that it can be harnessed to benefit all. While any of these three groups can abuse their position, it strikes me that a bunch of people who scream about wonderful checks and balances, seek to unleash an unconstrained private industry. Hope you enjoy your trip through the sausage grinder.
I'll grant you that they are powerful entrenched interests. But part of what gives them power is the government. If the government were smaller they'd be less able to use it against competitors and the public.
It is only with the combination of government regulation and worker representation that it can be harnessed to benefit all.
Why does it have to be "harnessed" to "benefit all" - we're talking about private property here. Do you need to be "harnessed" to "benefit all", Mr. Rabett? If "all" of us decide that you would best "benefit all" by cultivating turnips on a collective farm somewhere would that be acceptable? Is your solution communism then?
Also, many of the regulatory functions could be privatized via private civil litigation.